UniMex Protocol: Improving Crypto Leveraged Trading For DeFi Aficionados
The limitless developments in the cryptocurrency sector continue to emerge daily. More institutions are entering the space investing in Bitcoin, propelling the asset to hit record price levels. In this line, various cryptocurrency projects are exploring different solutions that seek to revolutionize the finance sector.
Notably, Decentralized Finance (DeFi) is taking center stage to bridge the gap between digital assets and traditional finance.
In this regard, UniMex is a new protocol that has set its eyes on the decentralization of margin trading in the cryptocurrency space.
What is UniMex?
UniMex is an emerging DeFi project operating under the Uniswap protocol offering margin trading. It has to do with the availability of margin trading in the crypto sector, just like in traditional finance.
Despite many margin trading platforms existing in the industry, most are still centralized. This comes with various challenges like control by a central authority. However, UniMex attempts to solve this by focusing more on a decentralized crypto margin trading platform.
UniMex and its Features
As highlighted, most of the existing margin trading exchanges are centralized, which does bring certain concerns. As one of the most heavily touted narratives in crypto goes – “not your keys, not your crypto.”
UniMex makes a bold claim, promising investors that the platform will always be available by operating on Uniswap protocol.
The project attempts to eliminate issues with price manipulation by allowing margin trading for ERC-20 pairs against Ethereum. Furthermore, the UniMex margin trading is on-chain rather than the popular off-chain approach. The anti-manipulation feature is achieved by imposing restrictions upon which ERC20 tokens are eligible for setting up a lending pool subject to the liquidity of the ERC20-ETH Uniswap trading pair.
UniMex also offers leverage within the range of 1 – 5x based on the liquidity of the ERC20-ETH Uniswap trading tokens and the soundness of the whole platform, which the ERC20 token represents.
The founders have rejected advances from centralized oracles like Oraclize and Chainlink. UniMex runs on the Uniswap TWAP (Time Weighted Average Price) Oracle to eliminate chances of price manipulation.
From the beginning, UniMex vows to remain transparent, and the margin trading engine is hosted on the Uniswap protocol. This means that all trades are on-chain and, in return, establishes a more decentralized system, unlike hashed trading parameters found in centralized exchanges.
UniMex has also designed a unique lending protocol that allows investors to borrow against several tokens up to maximum leverage for a particular Uniswap trading pool. The protocol gives room for a 10% fluctuation against the value of their position before enabling liquidation. This is a significant variation from the centralized crypto margin trading platforms.
Lenders on UniMex will also receive fees based on the denomination of the asset borrowed at the rate of 0.4% for fees enforced on margin traders upon borrowing tokens. To some extent, the protocol deviates from the goal of decentralization since all collateral from borrowers is denominated in ETH. However, this is a necessary step to ensure control of the margin trading process. The protocol’s design denotes all collateral from borrowers in ETH, sacrificing flexibility.
UniMex Latest Development
Although UniMex is a new project, it continues to experience extensive growth due to partnerships and new and unique features.
To meet the growing demand, UniMex has been adding a host of new features to the protocol. Recently, the project added the feature of new order types like Take Profit, Stop-Loss, and more. The team has launched the UniMex v1.2 version on ETH (Uniswap). Furthermore, the protocol will enable stablecoin deposits and withdrawals, including USDC, DAI, and USDT.
To decentralize the protocol’s governance, UniMex will unveil the UMXStaking feature aimed at liberating the project and enabling the creation of lending pools from an admin’s governance by the end of April 2021. With this feature, the community will be able to participate in the system’s governance by burning/staking UniMex recognized tokens.